RSM320H1 Chapter Notes - Chapter 21: Deferral, Income Statement, Financial Statement
Document Summary
Under ifrs, change in an accounting policy is permitted only when the change: Is required by a primary source of gaap, or: results in portraying reliable and more relevant information about effects of transactions, events or conditions (voluntary) Under aspe, there is a third type of policy change permitted without having to meet the reliable but more relevant test: between or among allowed aspe accounting options for: Investments in subsidiaries, and investments with significant influence or joint controls: development phase expenditures on internally generated intangible assets, defined benefit plans. Income taxes: measuring equity component of compound financial instruments. Future conditions and events and their effects cannot be known with certainty; therefore estimation requires exercise of judgment. Use of reasonable estimates is essential to the accounting process and does not undermine the reliability of financial statements. Examples of items requiring estimates include: uncollectible receivables. Fair value of financial assets/liabilities: useful lives and residual values of depreciable assets.
